Horizontal acquisition

Horizontal acquisition

Horizontal Acquisition

The acquisition of one company by another in the same or a similar industry. This is often a part of the market consolidation process, when too many companies exist for the market to support. They then acquire each other in order to create fewer companies that are more competitive. In venture capital, horizontal acquisitions and horizontal mergers may be part of a roll up process.

It argues that network effects tilt the distribution of customer surplus in vertical mergers on digital markets and therefore there might be a need for less intervention by antitrust authorities in horizontal mergers on digital markets in order to achieve higher economic efficiency.

Horizontal mergers among sellers in intermediate input market, where buyers are manufacturing firms, are more likely to raise price and be profitable in our model than in the Cournot model because capacity reports of sellers are typically strategic complements, not strategic substitutes.

The first horizontal mergers between companies producing the same product - aiming at scale economy production to lower the cost of producing a good - pushed officials to enact laws preventing oligopoly and market control.

In his lectures, Northwestern University Professor Michael Whinston focuses on three areas: price fixing, in which competitors agree to restrict output or raise price; horizontal mergers, in which competitors agree to merge their operations; and, exclusionary vertical contacts, in which a competitor seeks to exclude a rival.

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